Structure and Operation of the U.S. Economy

Entrepreneur: a business owner.
Sole proprietorship: Business organizations owned by one person
Partnership: A business organization in which two or more persons share responsibilities, costs, profits,
and losses.
Corporation: a company or group of people authorized to act as a single entity (legally a person) and
recognized as such in law.
Stock: the capital raised by a business or corporation through the issue and subscription of shares.
Dividends: a sum of money paid regularly (typically quarterly) by a company to its shareholders out of
its profits (or reserves).
Commercial banks: a bank that offers services to the general public and to companies.
Savings and loan associations: an institution that accepts savings at interest and lends money to savers
chiefly for home mortgage loans and may offer checking accounts and other services.
Credit union: a nonprofit-making money cooperative whose members can borrow from pooled deposits
at low interest rates.
Credit cards: a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods
or services on credit.
Interest: money paid regularly at a particular rate for the use of money lent, or for delaying the
repayment of a debt.
Bankruptcy: the state of being bankrupt.
Insurance: a practice or arrangement by which a company or government agency provides a guarantee
of compensation for specified loss, damage, illness, or death in return for payment of a premium.
Circular-flow model: An economic model that displays how households, businesses, and the government
interact in the U.S. economy.
Revenue: income, especially when of a company or organization and of a substantial nature.
Globalization: individuals & nations working across barriers of distance, culture & technology
(necessary in part due to interdependent nature of the world economy – scarcity & uneven
distribution of resources)
Specialization – when people, businesses, regions and/or nations concentrate on goods and
services that they can produce more efficiently than anyone else.
Work ethic: attitudes & behaviors that indicate one’s desire to do a job well & to take pride in a
job well done.
Contracts: an agreement between 2 or more parties for doing or not doing something
(enforceable by law)
Warranty: the promise made by a manufacturer or a seller to repair or replace a product within
a certain time period if it is faulty.